SEC disclosure reform: “Investors have a desire for more information, not less”

Last week, the SEC’s Director of Corporation Finance, Keith Higgins, spoke to the Los Angeles’ chapter of American Bar Association. He revealed more insight and direction the disclosure reform initiative is taking.

At this point, the discussions are still at the strategic level of disclosure, not eliminating a particular filing group, but making sure the content disclosed is meaningful to investors.

At the highest level, Mr. Higgins said investors have a desire for more information, not less. His staff’s job will be to find probable disclosure holes and make sure they are filled to the expectations of investors – all with actionable transparency in mind. Overload v. not germane.

For now, the only “tactile” point seems to pertain to the consideration of a “core disclosure” model: defined information that does not change often — such as a issuer’s business description, etc ­— would be disclosed in a “core” (annual?) document with the K’s and Qs filling in the timely and current disclosures. This would slightly reduce “word-count” and bring some cost savings.